Estate Planning for Clients' Digital Assets

Estate planning for a client's digital assets is an area of law that is still fairly new. However, I have experienced increasing demand by clients for services in this area as we continue to run full speed into the digital age.

This article will briefly identify some of the issues involving digital assets and steps that you can take to protect your digital assets as part of your estate planning efforts.

What Are Digital Assets?
The two main classes of digital assets are (1) any online account that requires a user name and password; or (2) any file stored in places including an individual's computer, mobile phone, server, local DVD or CD-ROM or online storage sites.

Digital Accounts
If you are the only person who has access to your online account, then what happens when you die? Much of the concern involves the rights of the online company, which were granted when you initially accepted the account's Terms of Service (TOS).

Several issues to consider for online accounts requiring a user name and a password include the following:

    • The TOS Agreement of most popular online companies rarely, if ever, allow for immediate or automatic transfer of the account to the personal representative of an individual's estate.


    • Without access to your bank and investment accounts, a trustee or executor of your estate will have difficulty obtaining necessary information for meeting the requirements of any underlying will or trust that you may have prepared during your lifetime.


    • Without access to your email, blog or website, the personal representative may not even be aware of certain ongoing obligations, especially with more transactions occurring online only.


  • The above concerns are multiplied if you conduct all, or any portion, of your business online as a revenue-generating source.

Digital Files

Files on an individual's computer are difficult enough to find, depending on the individual's level of organization or disorganization. A personal representative's job can become more difficult if the important data is stored off site.

Additionally, there are two main kinds of digital files to consider:

    • Client-Created Files - including scanned financial files, address books and digital photos, but can also include valuable business documents or intellectual property.


  • Client-Purchased Files - including music, videos and eBooks bought during an individual's lifetime. In the typical TOS, the seller only grants the individual buyer a non-transferrable license to use the work "for life".

Steps You Can Take Now

Through their TOS, several online companies have the right to delete an online account within a certain period of time after an individual's death. Also, a personal representative of a deceased individual's estate needs the ability to protect the decedent's digital files and hardware from beneficiaries who seek their possession before proper administration. For example, when there is a dispute among the potential beneficiaries of a deceased individual and those individuals may know passwords and can gain access to the deceased individual's assets.

The following are some practical steps you can take to protect your digital assets:

    1. Make a list of all digital assets. This should be a comprehensive list of your online accounts and data files, including email accounts, websites, hard drives, important Word and Excel documents, online storage accounts and social media accounts.


    1. List wishes for each asset. For local hardware containing data files, this can include leaving the asset directly to a specific beneficiary. For online accounts, this can include:


      • shutting down the account;
      • doing nothing;
      • archiving contents on CD or DVD;
      • creating an auto-response on the account; and/or
      • forwarding all messages to another place.


  1. Choose the person who will receive each asset.
  2. Provide access and control to the recipient.
  3. Specific Bequests In Wills/Trusts. We incorporate language into the client's trust or will designating who will be entitled to the ownership of a digital asset after the client's death.
  4. Transfer of Assets Into Trust During Client's Lifetime. There is a legal authority to support the proposition that a license granted by a TOS "for life" can apply for a trust's lifetime as well. As a result, if there is an assignment of the TOS to the trust, then in the event of an individual's death, the trust may still have rights under the TOS that otherwise would have been lost at the time the individual died.
  5. Consider Utilizing Online Digital Asset Services. Several online companies provide very good digital planning services such as secure maintenance of all digital asset information online, accessed by an individual's "digital executor" or other personal representative to such information in the event of an individual's death and storing messages to be delivered to loved ones after an individual's death. While there are several of these services, one such service that I have personally experienced success with is Website Succession Planning.

After an individual's death, I oftentimes see first-hand the effects of the number of people who try to avoid a lawyer's assistance completely in favor of estate planning services from what oftentimes proves to be unreliable. Based on the fact that digital asset planning as part of an individual's estate planning is a very new area of law, it is important to consult with your legal advisor with respect to any efforts that you are making concerning planning with respect to your digital assets. Although there are already several dozen online services offering digital death and afterlife services, you should be careful not to place all of your confidence and planning under many of these untested systems.

If you have any questions regarding your digital assets and how you may want to consider planning for these assets, please do not hesitate to contact us.

Dan A. Penning